Industry question

"Bob" wrote in message
ups.com...
I too am not a lawyer, but it seems to me that the suer would just name
all the LLCs in the filing and to me it seems perfectly reasonable to
do so.


I believe it's called "piercing the corporate veil."

Piercing the corporate veil refers to getting past the corporation and
making the owners personally liable, both financially and jail time
wise.

Which can be done by: showing the LLC or other entity is not
functioning as an LLC, (mixing of personal and business assets), or by
showing the LLC was not carrying out the normal business processes of a
corporation plus some other stratgies which escape me at the moment.
Oh, yeah, showing the officers knowing broke the law.

By stacking LLCs or any other business entity it appears to me the
previous poster is trying to greatly increase the amount of work a
lawyer would have to do to work his/her way up the chain to the assets
and hence make it less appealing. But if they are ALL owned/controlled
by the same people/entities, it seems to me a judge would allow them to
be all grouped together. And that is my question, I am wondering how
good a strategy that is, in the case where all the entities are
controlled or owned by the same group.

Also a common strategy I hear about is signing your house over to your
wife. But again I wonder how good of a strategy is that?

When I ran a flying club that owned a plane, we quickly ruled out a
partnership, the assumption of shared liability is a given. So if
member X flew into a high dollar asset the members Y and Z are
automatically assumed to be co-liable. Not so in a corp. Hence the
XXXXX Aero Club LLC.








larsen-tools wrote:
"Bob" wrote in message
ups.com...
I too am not a lawyer, but it seems to me that the suer would just
name
all the LLCs in the filing and to me it seems perfectly reasonable
to
do so.


I believe it's called "piercing the corporate veil."

wrote in message
ups.com...
My civilian employer is paying for me to get an MBA.

Such a deal! The best I could do was get my employer to pay for the
occasional class.


But that is the FAA's standpoint,

Which does not matter to the courts.

what happens when there is a crash
and the lawyers go after the kit manufacturer anyway? No one in my
program, including the professors, can imagine that kit manufacturers
are able to carry liability insurance--the cost would be astronomical.

I have made a couple of phone calls to a couple of makers, lest anyone
think that I am too lazy to find this out for myself. The two places I
called were not wild about discussing the whole topic, which I can
understand.

I understand why they may be queasy about talking to a stranger on the
phone. It may take a letter first, or even a trip!

I was just reading an article about Wicks Aircraft Supply in the latest
Private Pilot Magazine and they would make the ideal case if you can pry any
information out of them. They sell kits, parts, and now..."almost" factory made
aircraft. That's right! According to the article, they will sell you a 99%
factory made Light Sport aircraft and you go to their facility for five days to
"finish" building your aircraft and get flight training in it. To take the
trouble to go through that process, they must think that they are getting
significant legal shielding from the "homebuilt" procedure; even if the thing is
essentially factory made!


Vaughn

"Bob" wrote in message
ups.com...
I too am not a lawyer, but it seems to me that the suer would just name
all the LLCs in the filing and to me it seems perfectly reasonable to
do so.

Why Nevada?
Do you have to pay Nevada taxes?



Nevada and Delaware make revenue by having their governments create a haven
for cheaply formed, well protected corporations that pay no taxes on out of
state revenue. OTOH your state likely makes it so impossible to keep up with
all the regulations, fees, etc. that you wonder why anyone wants to own a
business.

As for filing against all the LLC's - To name all the LLC's, you first have
to find them. This takes time, and money. In the process you spend lots of
cash and start to learn that the guy you are suing has set things up in such
a way that the odds of a big collection look slim. If you have a good case,
he will likely drain all the money away before you can get to it. If you
have a REALLY good case he will take the money and move to a state based on
Spanish Common Law where he can spend it all on a homestead and you can't
touch it. Also, the intellectual property is often held in an offshore
corporation, though that is changing due to tax law reasons.

I am not a lawyer either, but there are plenty of them around except when I
need one it seems.

the others are, having a good idea, developing your idea, making it
"manufacturable," packaging, having the money for molds, tooling, R&D, and
a
production run.


I've got a leg up on most of that. I build plastic injection molds for a
living, so when I came up with a good idea, I built a mold from scraps I had
laying around the shop. I had a great idea, I had a patent, I had a mold, I
had great connections with molders, I figured the hard part was over. WRONG!
The hard part for me is figuring out how to market the darn thing at a price
the product can afford.

"Dude" wrote:
Also, the intellectual property is often held in an offshore
corporation, though that is changing due to tax law reasons.


Where did you read that as applicable to kitplanes? Whether or not
that poses a problem come judgment time if the defendant loses, the
real issue is what that asset is worth. If a kitplane mfr loses
because the design is found to be dangerous, how much might a
plaintiff's attorney think the value of the design has just been
whacked? I doubt in most cases that the value of the design is all
that much, because unit sales volume is too low to place much of a
"capitalized value" on it. It's also reasonable for the attorney to
conclude the liquidation value is too unpredictable in this fickle
market. How often has the poor-selling Pulsar changed hands? Bottom
line, these companies generally are just not "deep pockets," with
numerous examples of empty ones.

Fred F.

Well, I'd like to know just how prevalent lawsuits are in the
experimental market place.

I know just one is all you need, and being prepared will discourage
lawsuits.

But of the people reading who are/were involved in manufacturing/design
for the experimental market, how many of you were sued? What effect
did it have on your business?

My impression is that it does happen, but lawsuits generally speaking
have not been very successful, which matters little if you spend a ton
of money answering and defending.

"TaxSrv" wrote in message
...
"Dude" wrote:
Also, the intellectual property is often held in an offshore
corporation, though that is changing due to tax law reasons.


Where did you read that as applicable to kitplanes?

I didn't, I was not limiting my remarks to kit planes, sorry for the
confusion. Most of my experience in this area is mostly NOT aviation
related.


Whether or not
that poses a problem come judgment time if the defendant loses, the
real issue is what that asset is worth. If a kitplane mfr loses
because the design is found to be dangerous, how much might a
plaintiff's attorney think the value of the design has just been
whacked?

Excellent point.

I doubt in most cases that the value of the design is all
that much, because unit sales volume is too low to place much of a
"capitalized value" on it. It's also reasonable for the attorney to
conclude the liquidation value is too unpredictable in this fickle
market. How often has the poor-selling Pulsar changed hands? Bottom
line, these companies generally are just not "deep pockets," with
numerous examples of empty ones.

Fred F.

I would agree with you except that there are companies that succeed or at
least entertain and pay the owners enough to keep them going. Some fight is
usually put up to keep the company intact. I look at layering as insurance
against attacks. If one were going to sue a manufacturer for a grievance,
and the attourney said that it was fruitless but that you could likely put
them out of business for some amount of money, then you might see a case get
filed just over emotion or principal.

Layering raises the amount of money needed, and will scare off even rightful
claims.

In my opinion..........
Market it yourself.
Get yourself a website. Costco seems to have a good program -
costco.com/services/Web Site Hosting & Design Tools.
Advertise your website in magazines aimed at your audience........ boats,
planes, fishing,etc.
That's the key..... advertise your WEBSITE w/ a teaser describing your
product. A website is the cheapest way to get the information to the people
out there. Advertising can kill you.

Forget about getting your product into Home Depot, Costco, Sports
Authority,etc. ..... they really don't want to hear from you because.....
A) they have 35,000 sku numbers and they can't deal w/ 35,000 vendors
B) they don't buy "sole source".... meaning, from only ONE vendor/
manufacturer
C) somebody in the company has to back your idea as a good product.....
unlikely.... because if it bombs, that's not good for their career
D) whatever price you want, it's too high
E) if you could afford to put a million dollars of product into their
pipeline (for free) you wouldn't be in the game
F) I thought this was interesting..... stores don't own anything except the
cash registers .... all the merchandise doesn't get paid for (to you) until
60 to 90 days after it's been sold BY THEM. Neat, huh? In the mean time
you've re-stocked their shelves.
G) Forget about selling your patent to a big outfit like Stanley. They
don't want to hear from you either, for a different set of reasons.

Paintball, you do have a head start by being a mold maker. A product can't
involve cutting metal, wood or hand labor...... that means it has to be
injection molded, for it to be manufacturable on an industrial scale. The
best products drop from the press into the box.

I'm wishing for a surface grinder and an EDM machine and struggling w/ the
question...... should I build an RV-7A .... or .... continue ****ing away
time and money on "bright ideas" and molds. The plane is a sure thing,
developing products is more creative and potentially could pay for a
Bonanza...... see the dilemma?

Above all, KEEP YOUR DAY JOB.
Do it yourself. The fewer people you have to deal with, the better.




"LCT Paintball" wrote in message
news:vIL0e.987$NW5.104@attbi_s02...
the others are, having a good idea, developing your idea, making it
"manufacturable," packaging, having the money for molds, tooling, R&D,
and
a
production run.


I've got a leg up on most of that. I build plastic injection molds for a
living, so when I came up with a good idea, I built a mold from scraps I
had
laying around the shop. I had a great idea, I had a patent, I had a mold,
I
had great connections with molders, I figured the hard part was over.
WRONG!
The hard part for me is figuring out how to market the darn thing at a
price
the product can afford.

In my opinion..........
Market it yourself.
Get yourself a website. Costco seems to have a good program -
costco.com/services/Web Site Hosting & Design Tools.

You mean like this one www.lctproducts.com ?


Advertise your website in magazines aimed at your audience........ boats,
planes, fishing,etc.

I looked into that. A one month add in a popular womens magazine can cost
over $100,000. I'm not sure I could get enough orders to cover that kind of
expence.


That's the key..... advertise your WEBSITE w/ a teaser describing your
product. A website is the cheapest way to get the information to the
people
out there. Advertising can kill you.

I've even given away free product for clicking on an add. Again the cost of
advertising usually excedes the number of orders I get.



Forget about getting your product into Home Depot, Costco, Sports
Authority,etc. ..... they really don't want to hear from you because.....
A) they have 35,000 sku numbers and they can't deal w/ 35,000 vendors
B) they don't buy "sole source".... meaning, from only ONE vendor/
manufacturer
C) somebody in the company has to back your idea as a good product.....
unlikely.... because if it bombs, that's not good for their career
D) whatever price you want, it's too high
E) if you could afford to put a million dollars of product into their
pipeline (for free) you wouldn't be in the game
F) I thought this was interesting..... stores don't own anything except
the
cash registers .... all the merchandise doesn't get paid for (to you)
until
60 to 90 days after it's been sold BY THEM. Neat, huh? In the mean time
you've re-stocked their shelves.
G) Forget about selling your patent to a big outfit like Stanley. They
don't want to hear from you either, for a different set of reasons.

Ah,, I see you've done this before. I decided my product would go great in
the grocery store right beside the taco products. Just like you suggested,
large chains don't want 100,000 different vendors. Most of them buy from one
of about 4 major wharehouses. In order to get your product into their
wharehouse, you have to "rent" the space from them at around $10,000. Then,
you have to convice each individual store to place an order. And, for some
of the large chains, you have to "rent" the shelf space too. I can afford to
produce the product, and wait 3-6 months for payment, but I can't afford to
grease all the pockets. ;(



I'm wishing for a surface grinder and an EDM machine and struggling w/ the
question...... should I build an RV-7A .... or .... continue ****ing away

You've come to the right place. I've got a manual EDM for sale that has an
orbiting head on it that lets you produce undercuts like threads for about
$7,000... Or, I know a guy that has a large old machine that runs that he'd
give away if somebody would hall it off. Both machines are near Kansas City,
Mo


time and money on "bright ideas" and molds. The plane is a sure thing,
developing products is more creative and potentially could pay for a
Bonanza...... see the dilemma?

Yep, I LIVE the dilemma.


Above all, KEEP YOUR DAY JOB.
Do it yourself. The fewer people you have to deal with, the better.

My day job may be tough to keep. Mold work is heading to China. ;(
Anybody want to buy a mold shop?